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Export & Import Trends for March 2014
Thanks to robust exports to advanced nations, the monthly exports for March 2014 were the second highest in Korea’s history, with increasingly higher export growth witnessed in 2014. - Highest monthly exports: USD 50.48 billion in October 2013 - Export growth rate (year-on-year, %): (January 2014) -0.2 → (February) 1.5 → (March) 5.2 More specifically, exports of IT products rose, particularly wireless devices thanks to the growth of the Chinese LTE market and semiconductors as a result of DRAM price hikes, and exports of automobiles and ships grew as well. Meanwhile, exports of LCDs decreased as a result of a drop in panel prices, while petroleum products suffered due to a decrease in demand from major export partners and petrochemical products declined as a result of lowered unit prices of exported goods due to NAPHTHA price declines. - Export growth rate by item (%): Wireless devices 32.1, ships 18.7, automobiles 15.9, semiconductors 14.0, steel 6.7, general machinery -0.1, petroleum products -3.5, petrochemical products -5.0 and LCDs -10.4 Exports to the US, which have shown a temporary decline due to the cold weather and other factors, showed double-digit growth, fueled by robust exports of consumer products (automobiles, wireless devices, etc.) and machinery. In addition, exports to the EU have shown double-digit growth for three consecutive months thanks to robust exports of IT products and petroleum products, while the exports to ASEAN and China have increased thanks to export growth in the area of capital goods. Exports to Japan, prompted by export growth of steel and general machinery and base effects, showed growth for the first time since January 2013. Looking at the imports side, imports grew mainly in the areas of capital goods and consumer products. There was growth in imports of gases thanks to unit price hikes and in crude oil thanks to a rise in import amount growth, while imports of steel and coals declined. - Import growth rate of five major items (%): Gases 4.9, crude oil 0.4, petroleum products 0.0, steel - 1.9 and coal -14.6 Among capital goods, imports of semiconductor manufacturing equipment doubled, and imports of the IT sector, including parts of wireless devices, memories and LCD devices, grew. Among consumer products, imports of automobiles, clothes and shoes dramatically grew. Deputy Director Song Jeong-hun, Exp date2014-04-04
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4th Regional Comprehensive Economic Partnership (RCEP) Negotiations
The 4th round of Regional Comprehensive Economic Partnership (RCEP) negotiations will be held in Nanning, China for five days, from March 31 (Mon) to April 4 (Fri), 2014. The Korean delegation, headed by Director-General for FTA Negotiations of the Ministry of Trade, Industry & Energy Kim Young-moo, will include officials from the Ministry of Trade, Industry & Energy, the Ministry of Strategy and Finance, the Ministry of Agriculture, Food and Rural Affairs, and the Ministry of Oceans and Fisheries. * RCEP (Regional Comprehensive Economic Partnership): 16 countries, including 10 ASEAN countries, Korea, China, Japan, Australia, New Zealand, and India, engage in discussing economic integration in the Asia Pacific region. At the fourth round of negotiations, discussions will be held on the methods for Liberalization of Goods, Services and Investment, as well as Regulations and Cooperation issues (Competition, Intellectual Property Rights, Economic & Technical Cooperation, etc.). In order to achieve effective market liberalization in Goods, Services and Investment, negotiations will be carried out with a focus on the modalities (negotiation method, negotiation goal, etc.) proposed by various countries. The discussions will also cover key elements of interest to Korea in the comprehensive FTA negotiations, such as Competition & Intellectual Property Rights. The goal of the RCEP is to conclude a comprehensive, high level FTA among participating countries. This year, 4 rounds of negotiations and 1 ministerial-level talk will be held. date2014-03-31
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Sales Trend of Major Distributors for February 2014
Non-Food Sectors ○ Electronics & Culture - Year-on-Year : -6.9 - Month-on-Month : -9.4 ○ Apparel - Year-on-Year : -21.9 - Month-on-Month : -22.5 ○ Living - Year-on-Year : -18.6 - Month-on-Month : -23.4 ○ Sports - Year-on-Year : -3.8 - Month-on-Month : -9.8 ○ General Merchandise - Year-on-Year : -18.3 - Month-on-Month : -17.5 ○ Sub Total - Year-on-Year : -15.3 - Month-on-Month : -18.3 Foods ○ Sub Total - Year-on-Year : -29.3 - Month-on-Month : -37.8 ○ Total - Year-on-Year : -23.1 - Month-on-Month : -30.0 Non-Food Sectors ○ General Merchandise - Year-on-Year : -2.5 - Month-on-Month : -6.7 ○ Ladies’ Formal Wear - Year-on-Year : 2.7 - Month-on-Month : -17.2 ○ Women’s Casual Wear - Year-on-Year : 2.5 - Month-on-Month : -10.6 ○ Men’s Wear - Year-on-Year : -4.6 - Month-on-Month : -31.5 ○ Children & Sports - Year-on-Year : 3.3 - Month-on-Month : -8.7 ○ Living - Year-on-Year : 12.7 - Month-on-Month : -4.7 ○ Global Brands - Year-on-Year : 18.1 - Month-on-Month : 2.6 ○ Sub Total - Year-on-Year : 3.9 - Month-on-Month : -10.1 ○ Foods - Year-on-Year : -29.2 - Month-on-Month : -43.9 ○ Total - Year-on-Year : -2.4 - Month-on-Month : -16.8 Revenues of convenience stores grew by 4.1% year-on-year due to increased sales of processed food such as beverages, fueled by the warmer climate than the previous year. However, revenues declined by 7.8% month-on-month due to a revenue decrease in all products, including tobacco, as the holiday season was over last month. Non-Food Sectors ○ Living - Year-on-Year : 2.0 - Month-on-Month : -8.9 - Percentage of sales(‘14.2) : 3.5 ○ General Merchandise* - Year-on-Year : -15.7 - Month-on-Month : -8.9 - Percentage of sales(‘14.2) : 4.7 ○ Tobacco, etc. - Year-on-Year : 3.0 - Month-on-Month : -7.6 - Percentage of sales(‘14.2) : 37.7 ○ Sub Total - Year-on-Year : 0.7 - Month-on-Month : -7.8 - Percentage of sales(‘14.2) : 45.9 Foods ○ Beverages and Processed Goods - Year-on-Year : 7.5 - Month-on-Month : -6.9 - Percentage of sales(‘14.2) : 47.4 ○ Instant foods (including some perishable goods) - Year-on-Year : 5.7 - Month-on-Month : -13.2 - Percentage of sales(‘14.2) : 6.7 ○ Sub Total - Year-on-Year : 7.3 - Month-on-Month : -7.7 - Percentage of sales(‘14.2) : 54.1 ○ Total - Year-on-Year : 4.1 - Month-on-Month : -7.7 - Per date2014-03-27
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South Korea Achieves No. 2 Global Market Share for Semiconductors
According to the international semiconductor market research group HIS Technology (US), in 2013 South Korea reached the No. 2 position in its global share of the semiconductor market, trailing the US and surpassing Japan for the first time in history. This was attributable to the strong memory market and Korea’s strengthened competitiveness in the area of semiconductors for mobile devices. According to the final data released, South Korea’s global market share was up slightly from date2014-03-25
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Gaps Remain between Korea and China on Major Issues, including Goods
The 10th round of FTA negotiations between Korea and China was held at KINTEX, Ilsan, for five days from March 17 (Mon) to 21 (Fri), 2014. Officials from the relevant Ministries participated in the negotiation, with the Korean delegation led by Woo Tae-hee, Assistant Minister for Trade & Chief Negotiator for FTAs of the Ministry of Trade, Industry and Energy, and the Chinese delegation led by Wang Shouwen, Assistant Minister of Commerce. During the 10th round of negotiations, the Parties discussed a range of issues, including Tariff Concession, Services, Investments, Regulations and Cooperation issues. Both Parties discussed tariff concessions for specific items, based on the already exchanged Offers and Requests. Both parties requested improved market access for areas of mutual interest, but could not reach agreement due to the significant differences between the two countries’ positions. The two countries will continue to negotiate on market access for goods, and seek ways to decide on the specific handling of each item currently under contention. The parties also had technical discussions based on the draft text, in areas such as Trade Remedy, Rules of Origin, Customs Procedures & Trade Facilitation, SPS and TBT. The two countries also continued their discussions on services, investments, intellectual property rights, competition, the environment, general provisions, e-commerce and economic cooperation (including agricultural and fisheries cooperation, industrial cooperation and government procurement). The parties decided to host the 11th round in China, at a time and place to be determined. date2014-03-24
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Voice of Industry Leads the Way for Next Steps in Trade Policy
The Ministry of Trade, Industry and Energy (MOTIE, Minister: YOON Sang-jick) and the Korea International Trade Association (KITA, Chairman & CEO: HAN Duck-soo) held the Trade & Industry Forum* at COEX on the afternoon of Tuesday March 18. Participants in the forum, which was co-chaired by the heads MOTIE and KITA, included Korea Federation of Textile Industries Chairman Ro Hee-Chan, Korea Automobile Association President Kim YongGeun, INNO BIZ CEO SeongMyung-gi, Korean Advanced Farmers Federation CEO Kim Jun-bong, Korea Food Research Institute Chairman Park In-gu, Korea Fisheries Association Chairman Jae-Young Park, Korean Bar Association President We Chul-Whan, Korea Federation of Banks Chairman BahkByongWon, and Korea Association for ICT Promotion Vice President Rho Young-Gyu. * Trade & Industry Forum: Led by the Minister of Trade, Industry and Energy and the CEO of KITA as co-chairmen, the forum included leaders in the industries of manufacturing, agriculture & fisheries, and services, and established 22 subcommittees to support the development of countermeasures related to negotiations, analyze the impact of negotiations on each industry, and form complementary measures in the domestic market. At the forum, the participants discussed ①the direction of Korea’s trade policies, ②overall trends and possible response options for the Trans-Pacific Partnership(TPP) and overview of the ROK-Canada FTA, and ③ways to utilize the achievements made in Korea's summit diplomacy. There was also a report on ④the outcomes of subcommittee meetings of the Trade & Industry forum Recently, Korea concluded bilateral free trade negotiations with Australia and Canada, both of which are outstanding achievements. However, there are numerous challenges left ahead, such as the Korea-China FTA, the Trans-Pacific Partnership (TPP) and the impending expiry of the special treatment for rice under the Agreement on Agriculture of the World Trade Organization. Korea plans to pursue the Korea-China FTA with highest priority with expectations to offer more opportunities to Korea's corporations. In parallel, the government will work towards mitigating the negative impacts on vulnerable industries such as agricultural and fisheries goods. When it comes to joining the TPP, there will be a thorough review of the TPP's impact on our industries based upon the results of the preliminary bilateral talks. At the forum, high-level government officials provided information on policies aimed at reducing non-tariff barriers(NTBs) along with an introduction of cases in which NTBs were reduced. There was also an emphasis on the importance of cooperation with the industry. In terms of the TPP's impact on each industry, the government and industry reached a consensus on the need to mutually strengthen dialogue and cooperation. In particular, both sides stressed the need to analyze not only the short term but also the mid-to-long-term impact of the TPP, to monitor the progress of the pact and to review and prepare for the impact of supply chain in the TPP region on corporations and industries. To help businesses enjoy the benefits of achievements made through summit diplomacy initiated by President Park Geun-hye, the government launched a special web portal. There was a demonstration of the portal during the forum, showing how businesses can find real business deals that can be made based on the agreements made between heads of States. The government unveiled plans to maximize the mid-to-long-term results of summit diplomacy by establishing systems to provide customized support to companies that can benefit from the achievemen date2014-03-20
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Evaluation of the Korea-US FTA after Two Years
Korea-US trade volume rose by 4.1% ($197.4B→$205.4B) following the implementation of the KORUS FTA. In the second year of the FTA, the trade volume of products that benefited under the pact rose by 13.0% ($41.7B→$47.1B), but the trade volume of products that were excluded from the agreement was down by 8.6% ($62.6B→$57.2B). Since the FTA took effect, Korea's exports to the US have grown faster than total exports, which has meant that the agreement has served as a sustaining pillar for exporters. Exports of products included in the FTA grew for two consecutive years (1st year 1.6%→2nd year 5.4%), with continuous growth in automobile parts (11.5→8.3%) and petroleum products (36.1→5.9%*). However, the growth rate in those sectors dropped sharply due to falling export prices and the extension of overseas oil refinery facilities. Exports of excluded items decreased (-3.5%) during the first year of the FTA, but went up in the second year (5.7%). Exports of wireless communication devices plunged during the first year of the FTA (-34.1%) only to go up again during the second year (31.3%), thanks largely to a boom in the LTE market. Exports of automobiles rose (16.5→14.7%) over the two years, due to improved quality and brand awareness. Exports of Korean agricultural products and food grew by 21.4% during the second year of the FTA, and by 9.5% during the first year. (Mar 2013~Feb 2014) It also rose in all sectors, including processed food, fruits • vegetables, livestock products, and forest products. In particular, exports of processed food (e.g., tobacc date2014-03-18
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Korea, China Hold 10th Round of FTA Negotiations
The two parties will continue talks in the areas of goods, services, investment, regulations, and fields for cooperation. Items on the agenda for each sector include: - Goods: Hold concession negotiation for each product category along with drafting consolidated text in the areas of goods, product origin, customs procedure, sanitary and phytosanitary (SPS), technical barriers to trade (TBT), and trade remedies - Services & investment: Discuss methodologies of liberalization and agreed documentation in service & investment - Regulations & cooperation: Discuss agreed documentation in the areas of intellectual property rights, competition, E-commerce, transparency, environmental & economic cooperation date2014-03-17